1. Regulatory Updates
1.1. India
1.1.1. RBI targets P2P credit card payments via third-party apps
In response to concerns over credit card misuse, the Reserve Bank of India (“RBI”) is cracking down on peer-to-peer (“P2P”) credit card payments facilitated by third-party apps. According to reports, these transactions, used for paying rent and tuition fees, violate credit card norms as they bypass regulations by routing funds through a third-party escrow account. The RBI officials emphasised that credit card transactions are meant to be strictly between merchants and customers, and any unauthorised routing through a third party is under scrutiny. Fintech firms like CRED and OneCard offer this service, charging fees ranging from 1.5 per cent (one point five per cent) to 3 per cent (three per cent). This action follows the RBI’s decision to bar Visa from offering similar services, which is part of an effort to ensure compliance and prevent unauthorised transactions. Inc 42
1.1.2. Nine NBFCs surrender their Certificate of Registration to RBI
The following NBFCs have surrendered their Certificate of Registration (CoR) to RBI.
| Name of the Entity | Cancellation order date |
| L&T Finance Limited | January 31, 2024 |
| L&T Infra Credit Limited | January 31, 2024 |
| Marudhar Food & Credit Ltd | February 06, 2024 |
| Creative Intra Limited | February 14, 2024 |
| Jinvani Trading & Investment Company Pvt Ltd | February 19, 2024 |
| Manjushree Fincap Private Limited | February 19, 2024 |
| Shruti Financial Services Private Limited | February 19, 2024 |
1.1.3. RBI cancels licences of four NBFCs
RBI, under Section 45-IA (6) of the Reserve Bank of India Act, 1934, has cancelled the license of the below-mentioned NBFCs.
| Name of the NBFC | Cancellation order date |
| Nimisha Finance India Private Limited | February 08, 2024 |
| R.M.B. Finance Company Limited | February 14, 2024 |
| Suyash Finovest Pvt Ltd | February 28, 2024 |
| Kamdhar Leasing and Finance Limited | February 29, 2024 |
1.1.4. Monetary Penalties
RBI imposes monetary penalties on the following financial institutions:
| Name of the financial institution | Penalty Imposed | Reason |
| Bandhan Bank Ltd | INR 29,55,000 (Indian Rupees Twenty-Nine Lakh Fifty Five Thousand Only) | Contravention of/non-adherence of provisions of ‘Reserve Bank of India (Interest Rate on Deposits) Directions, 2016’. |
| Bank of India | INR 1,40,76,000 (Indian Rupees One Crore Forty Lakh Seventy Six Thousand Only) | Contravention of/non-adherence with directions issued by RBI on ‘Interest Rate on Deposits’, ‘Customer Service in Banks’, ‘Interest Rate on Advances’, ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, and ‘Membership of Credit Information Companies (CICs)’ and contravention of provisions of Credit lnformation Companies Rules, 2006 (ClC Rules). |
| Indostar Capital Finance Limited, Mumbai, Maharashtra | INR 13,60,000 (Indian Rupees Thirteen Lakh Sixty Thousand Only) | Contravention of/non-adherence with ‘Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016’ and with certain provisions of the Reserve Bank of India Know Your Customer (KYC) Directions, 2016. |
1.2. Bangladesh
1.2.1. Bangladesh Bank initiates bank mergers and acquisitions
Bangladesh Bank plans to facilitate mergers and acquisitions among banks starting March 2025 if voluntary actions are not taken by December this year. This follows concerns over the financial health of some institutions, prompting the issuance of a Prompt Corrective Action (PCA) framework guideline in December. Emphasising the protection of depositors’ funds and the viability of strong banks, detailed guidelines will be provided, ensuring job security for employees. Audit firms will evaluate banks before any mergers. Despite recent reports categorising banks into red, yellow, and green zones, the central bank clarifies this is not the sole indicator of bank health. Around 40 (forty) out of 61 (sixty-one) banks are reportedly performing well, with plans to merge around 10 (ten) weak banks. Asia News Network
1.3. Vietnam
1.3.1. Saladin Technology Insurance partners with ZaloPay for digital insurance services in Vietnam
In collaboration with ZION Joint Stock Company, Saladin Technology Insurance is digitising insurance services in Vietnam through the ZaloPay e-wallet platform. Initially focusing on Payer Insurance, which allows users to add insurance fees to monthly bill payments, the partnership has expanded to include travel insurance options directly accessible through the ZaloPay app. Nearly 40,000 (forty thousand) users have already benefited from these integrated insurance services, with plans to introduce more products in 2024 to address diverse consumer needs. Leveraging ZaloPay’s extensive service ecosystem, the partnership aims to make insurance purchasing more accessible. Fintech Singapore
2. Trends
2.1. CoinSwitch plans retail investment platform under PeepalCo
CoinSwitch, India’s leading cryptocurrency platform, recently achieved 20 (twenty) million registered users on its app. In response, the founders plan to launch a retail investment platform by June 2024. The company, founded in 2017 by Ashish Singhal, Govind Soni, and Vimal Sagar Tiwari, has received backing from top investment firms and has raised over USD 300 million (United States Dollar Three Hundred Million Only). CoinSwitch introduced its umbrella brand, PeepalCo, to consolidate its business verticals and enter the wealthtech space. This strategic move aims to transition from a single-product company to a multi-product organisation. Under PeepalCo, CoinSwitch and its expansions will operate. CoinSwitch Ventures will merge with PeepalCo, overseen by PeepalCo Group leadership, without impacting CoinSwitch’s core functionality. Inc 42
2.2. Jar ventures into P2P lending with ‘Jar Plus’ in LenDenClub partnership
Jar, a micro-savings platform backed by Tiger Global, is planning to venture into the P2P lending space with ‘Jar Plus’, in collaboration with the Non-Banking Financial Company (“NBFC”) LenDenClub. Currently, in a testing phase, Jar Plus is being introduced to select customers within the Jar platform to gather feedback and make necessary adjustments. P2P lending involves a direct connection between borrowers and lenders, with platforms like Jar assisting NBFCs in customer acquisition while the NBFCs assess borrowers and secure consent from lenders before disbursing loans. Moneycontrol
2.3. Zopper eyes expansion and growth in the insurtech sector
Zopper, a business-to-business (B2B) insurtech platform from India, eyes expansion into similar growth markets. With a focus on a 50-60 per cent (fifty to sixty per cent) compound annual growth rate (CAGR) in gross written premium (“GWP”) over the next few years, it aims to strengthen partnerships with banks, NBFCs, travel portals, brands, and retail chains. Zopper leverages its APIs to widen distribution channels. While considering expansion, India remains the primary focus, targeting USD 300 million (United States Dollar Three Hundred Million Only) in GWP by March 2024. By integrating with established businesses, Zopper experiences rapid growth, tapping into their captive audiences for seamless insurance offerings. Through bank and NBFC partnerships, Zopper aims to simplify insurance access and increase awareness among consumers. Business Standard
2.4. Zerodha Fund House considers external funding amidst mutual fund expansion
Zerodha’s Asset Management Company (“AMC”), Zerodha Fund House, is reportedly exploring the possibility of raising up to USD 100 million (United States Dollar One Hundred Million Only) from various investors. However, Zerodha Fund House has stated that it is not currently engaged in any discussions regarding external funding. Nithin and Nikhil Kamath, the founders of the stock broking giant, have traditionally operated without external funding since Zerodha’s inception in 2010. This news emerges as Zerodha intensifies its presence in the mutual fund sector amidst increasing competition. Zerodha Fund House, a joint venture between Zerodha and invest tech platform Smallcase, aims to offer transparent and affordable mutual fund options as a passive-only AMC. Inc 42
3. Sector Overview
3.1. Private banks gain market share in deposits over public peers: RBI
4. Business Updates
4.1. Perfios secures funding to expand global presence
Perfios, headquartered in Bangalore, plans to utilise new funding from TVG to expand its global presence across Southeast Asia, Africa, and the Middle East and explore growth opportunities through acquisitions. With backing from investors like Kedaara Capital, Warburg Pincus, and Bessemer Venture Partners, this latest investment from TVG follows Perfios’ successful USD 229 million (United States Dollar Two Hundred Twenty-Nine Million Only) Series D funding last September, elevating its valuation to over USD 1 billion (United States Dollar One Billion Only), making it India’s latest fintech unicorn. Perfios aims to advance its partners’ digital transformation efforts, contributing to global financial inclusion. Fintech Futures
4.2. Indian government and ADB partner to boost fintech at GIFT City
The government and the Asian Development Bank (ADB) have signed a USD 23 million (United States Dollar Twenty Three Million Only) loan agreement to boost fintech education, research, and innovation at Gujarat International Finance Tec-City (“GIFT City”). GIFT City, a joint initiative of the Centre and the Gujarat government, aims to develop India’s financial services and fintech ecosystem. The agreement includes the establishment of an International Fintech Institute (“IFI”) at GIFT City. The IFI will offer industry-aligned fintech training programs in partnership with global institutes and universities. It will also support startup growth, particularly women-led startups, through incubation and acceleration services, fostering collaboration with industry and venture capital funds. These efforts are expected to enhance employment opportunities and productivity in new technologies. Business Standard
4.3. Paytm granted approval as a third-party UPI app by NPCI
The National Payments Corporation of India (“NPCI”) has approved One97 Communications Ltd, the parent company of Paytm, to operate as a third-party Unified Payment Interface (“UPI”) app ahead of the RBI’s March 15 deadline. This approval, granted under the multi-bank model, involves YES Bank, State Bank of India, HDFC, and Axis Bank. YES Bank will serve as the ‘merchant acquiring bank’ for both current and new UPI merchants associated with One97 Communications, with the ‘@Paytm’ handle redirected to YES Bank. This ensures uninterrupted UPI transactions and AutoPay mandates for both existing users and merchants. NPCI has instructed One97 Communications to migrate all current handles and mandates to new PSP banks as needed. Financial Express
4.4. Aditya Birla Capital approves merger with Aditya Birla Finance
Aditya Birla Capital Limited has approved the merger of its wholly-owned subsidiary, Aditya Birla Finance Limited, subject to regulatory approvals. Aditya Birla Capital is a listed systemically important non-deposit-taking core investment company (NBFC-CIC), while Aditya Birla Finance is a non-deposit-taking systemically important NBFC (NBFC-ICC). The merger aims to comply with RBI’s Scale-based Regulations, necessitating Aditya Birla Finance’s listing by September 30, 2025. Aditya Birla Capital Limited manages aggregate assets under management of approximately INR 4.1 lakh crore (Indian Rupees Four point One Lakh Crore Only) as of December 31, 2023. Financial Express
Disclaimer
The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.
